Top 10 Institutions Weigh In: As Geopolitical Conflicts Extend Long-Term, Which A-Share Sectors Will Continue to Benefit?

This week, the Shanghai Composite Index fell 3.38%, the Shenzhen Component Index declined 2.90%, while the ChiNext Index rose 1.26%. How will the A-shares market perform next week? We have summarized the latest investment strategies from major institutions for investors’ reference.

Zhejiang Merchant Strategy: A-shares Build Momentum to Reach New Heights, Suggesting Four Key Directions

Looking ahead, the Shanghai Composite Index may gradually stabilize after mid-March, with some growth indices stabilizing by late April. From a quarterly perspective, a “systematic slow bull” remains, and it is expected that after the second half of Q2 2026 to Q3, the Shanghai Index may challenge the 5178-2440 range, reaching the 0.809 quantile. In terms of style rotation, mid-to-large caps are favored, with balanced growth and value. Industry allocation ideas include “both old and new energy, with cyclical consumption adding sparkle.” We recommend focusing on four main directions: strong performers in new energy, traditional industries likely to be revalued under the HALO trading environment, internal expansion of cyclical commodities, and segmented consumer goods. Thematic focus includes AI reshaping the value foundation, with attention to “HALO” trading and new opportunities for token overseas expansion.

Galaxy Strategy: Limited Downside Space for A-shares, Market Focus Shifting Toward Defensive Assets

The duration and evolution of geopolitical conflicts remain highly uncertain, and short-term disruptions to global risk assets are unlikely to subside soon. Global equity markets are expected to continue high volatility. However, supported by domestic logic, the downside for A-shares is relatively limited, and the market is likely to digest external pressures through oscillation, structural rotation. Structurally, the market’s trading focus is on inflation logic, with oil price movements under geopolitical conflicts still a key variable influencing recent market structure. Allocation-wise, the market is shifting toward defensive assets, with attention to financials, utilities, and transportation.

GF Strategy: Setting Aside US-Iran Tensions and High Oil Prices—Which Industries Can Maintain Independent High Prosperity?

Currently, overseas AI-related sectors like optical communications have extended visibility into 2027, remaining a clear growth direction and the main position of institutions. However, their performance is relatively linked to changes in Middle East conflicts (oil prices → US interest rate environment → US AI → domestic supply chain). Short-term volatility remains hard to control. Looking ahead, industries that can sustain high growth independently—if their trends are relatively decoupled from geopolitical tensions and high oil prices—should have an advantage regardless of how US-Iran situations evolve. To control portfolio volatility and hedge risks, we suggest continuing to allocate two beta sectors that are inherently upward trending and less affected by oil prices: energy storage chain (inverters/lithium batteries) and domestic AIDC chain (especially ByteDance-related).

Zhongtai Strategy: Long-term Geopolitical Conflicts—Which A-shares Sectors Will Continue to Benefit?

From a longer-term perspective, geopolitical turmoil may have shifted from a phase impact to a structural trend. On one hand, the demand center for upstream resources like non-ferrous metals is rising, supported by increased needs in military, energy, and manufacturing expansion. On the other hand, midstream equipment manufacturing demand is also rising, with sectors like engineering machinery and electrical equipment expected to benefit from global infrastructure and manufacturing restructuring. For China, with its complete industrial system and cost advantages, it remains highly competitive in global re-shoring efforts, and external demand for related industries is expected to rise.

Hua Jin Strategy: Short-term Volatility in A-shares Likely to Persist, Balanced Allocation Recommended

Currently, supported by policies, fundamentals, and liquidity, A-shares show resilience and are expected to remain volatile in the short term. We recommend balanced allocation among high-quality tech, some cyclical, and undervalued dividend sectors. Specifically, sectors with upward policy and industry trends include AI-powered power and energy storage, AI hardware in communications and electronics (semiconductors, AI hardware), non-ferrous metals, chemicals, military (commercial aerospace), and pharmaceuticals. Also, low-valuation dividend sectors like coal, electricity, and banking.

CITIC Construction Investment: Internal Stability, External Uncertainty—Focus on Structural Opportunities with Policy Catalysts and Earnings Visibility

Overall, we believe A-shares next week will likely fluctuate within a range, with indices repeatedly testing the 4,000-point mark. External factors like the Fed’s hawkish stance and tightening global liquidity contrast with domestic economic recovery and policy support, creating a tug-of-war. No clear trend is expected, and structural opportunities remain key. Focus on policy catalysts and earnings certainty as main investment themes.

Xingzheng Strategy: External Disruptions Gradually Diminish, Focus on Cyclical Opportunities with Certainty

Recent market adjustments have largely priced in pessimistic expectations, leaving room for positive surprises and market recovery. As external shocks weaken and earnings season approaches, the market will increasingly focus on sectors with clear cyclical prospects. Tech and export-oriented stocks, having been discounted due to geopolitical and liquidity concerns, now show potential for independent growth driven by their own industry trends and minimal oil price sensitivity. High-quality stocks are expected to perform better as the market shifts focus.

CITIC Securities: Divergences and Scenarios of Middle East Conflict—Back to Square One, Key Decision in April

The trajectory and impact of Iran conflicts are highly uncertain, with three core issues unresolved: 1) the extent of maritime navigation recovery after conflict intensity decreases; 2) whether the Fed prioritizes inflation indicators or employment data; 3) whether China faces cost shocks or supply chain re-shoring opportunities. These questions may only clarify by April. The broader rebound of PPI and price transmission, along with corporate earnings recovery, will be key directions this year—awaiting clarity in April.

Guojin Strategy: Clearing the Fog—Revaluation of Chinese Manufacturing Assets

The narrative of global tangible assets rising continues. Only by clearing the dollar fog can we see the truth: first, energy security is crucial amid global turmoil, with a focus on primary energy like oil, shipping, coal, copper, aluminum, gold, and rubber. Second, China’s manufacturing remains the global ballast, with slower asset flows than financial markets, awaiting revaluation—especially in power equipment, new energy, machinery, and chemicals. Third, with stabilizing factors, seek structural opportunities in consumption—tourism, scenic spots, flavor fermentation, beer and alcohol, pharmaceuticals, and medical aesthetics.

Open Source Strategy: Reviewing Past Overseas Shocks, A-shares Have Great Potential for Recovery

Entering the third week of Middle East conflict, its intensity and spillover effects have expanded from targeted strikes to multi-dimensional risks involving energy facilities, shipping, and regional politics. During short-term shocks, it’s better to “stay calm and avoid action”; when impacts are prolonged and uncertain, reduce positions and control risks. The index is likely to recover to pre-shock levels. Even if shocks intensify unexpectedly, they can be viewed as opportunities for excess cash gains, gradually increasing positions.

(Source: Oriental Wealth Research Center)